said to be raising as much as $4 billion at a valuation of more than $20 billion<\/a>, is still on its way to hitting $1 billion in annual revenue this year \u2014 though CEO Adam Neumann said at TechCrunch Disrupt NY 2017 that it\u2019s not quite as simple as betting big on enterprise deals.<\/p>\nNeumann said that enterprise deals, which would help handle office space for larger groups of employees, now account for 30 percent of the company\u2019s new business. But originally synonymous with tiny teams in tiny offices or small startups strewn across a multitude of wide open co-working spaces, WeWork has to tackle the problem of company cultures changing as they mature and figuring out how to host those companies.<\/p>\n
\u201cWhen you bring in enterprise you have to ask, \u2018am I changing the environment we\u2019ve created and worked so hard to create?’\u201d Neumann said. \u201cThe kind of departments\u00a0are very similar to our members, the average\u00a0age is 30 to 35 years old, everyone wants to create life\u2019s work\u2026 We\u2019re saying we\u2019re keeping a close eye on it, there\u2019s definitely a cap \u2014 no question there\u2019s a cap.\u201d<\/p>\n
If WeWork is going to grow into that $20 billion-plus valuation, the company is going to have to figure out how to position itself as a company that has real revenue, with real margins, that justifies a revenue multiple for a private company that signals a fully sustainable company going forward. But like any startup, Neumann said that the company is still focusing on growth and not worrying about striking the kind of profitability the public market might demand for a company like WeWork, which he says needs to be defined as something beyond a real estate or a technology company.<\/p>\n
To the possible chagrin of investors and employers looking for liquidity, hitting that profitability might not be coming for the time being, Neumann said. But the pitch as a tech company alongside a real estate company may be a bit easier as he says WeWork has a lot of analysis going on behind the scenes to make sure spaces are optimized. If a space is underused, for example, WeWork can detect that with sensors and figure out how to re-allocate it \u2014 something that might not be possible at a larger organization.<\/p>\n\u201cPer choice, when you have a margin, you can choose when to be profitable,\u201d he said. \u201cWe like to hover around EBITDA\u00a0break even and choose where we want to move. Right now we\u2019re in high growth, we don\u2019t see that stopping any time soon.\u201d<\/p>\n
For a company like WeWork, people working on startups or smaller companies \u2014 or even possibly larger ones \u2014 may find themselves questioning their relationships with the company in the event of a downturn. But Neumann said he isn\u2019t too worried about it, saying that the WeWork has tried to build a lasting community that adds value beyond just a workspace. While WeWork is known for workspaces, Neumann and the company have worked to build communities within those workspaces, which makes people in even different companies feel like they are part of something tight-knit (and work even harder as a result).\u201d<\/p>\n
\u201cIf it\u2019s servicing\u00a0a real need, that doesn\u2019t go away in a recession,\u201d Neumann said. \u201cIf you\u2019re serving a true need, and if you have a loyal group of customers that are falling\u2026 As the world goes through\u00a0a tough time, these customers\u00a0will stay with you.\u201d<\/p>\n
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Featured Image: TechCrunch<\/small><\/p>\n
Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/UE2VkKIQGZg\/<\/p>","protected":false},"excerpt":{"rendered":"
WeWork, which is said to be raising as much as $4 billion at a valuation of more than $20 billion, is still on its way to hitting $1 billion in <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-5409","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t
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